Real Madrid's Luka Modric, FIFA's footballer of the year, will not face charges of giving false testimony in the criminal trial of his former boss at Dinamo Zagreb, who was convicted in June of evading tax and siphoning transfer fees from the club.

A Croatian appeals court rejected a request by prosecutors to have charges reinstated against the Croatian international midfielder that had been thrown out by a lower court.

"The [Zagreb county] court rejected the appeal by the state attorney and confirmed the first-instance decision that there was not a sufficient level of evidence to raise an indictment," the court's spokesman Kresimir Devcic told reporters.

Modric, crowned the Best FIFA Men's Player 2018, testified last year at the trial of a tax official and three former senior officials from Dinamo Zagreb, including its former chief executive Zdravko Mamic.

In June, Mamic was sentenced to six-and-a-half years in jail for siphoning millions of dollars in transfer fees from the club, including part of the $16.5 million the club was paid when Modric moved to Tottenham Hotspur in 2008.

Despite his conviction, Mamic is at large and living in Bosnia.

Prosecutors accused Modric of giving false testimony at the trial about the dates when he signed annexes to his professional contracts which covered transfer fees.

In September, Croatia's state attorney also charged another Croatia international, Liverpool defender Dejan Lovren, with the same offence as Modric. That case is still pending.